CFPB Proposes Rule to Accelerate Shift to Open Banking

Adam Witmer
Regulatory Update

On October 19, 2023, the CFPB proposed a rule that would accelerate a shift toward open banking, where consumers would have control over data about their financial lives and would gain new protections against companies misusing their data. According to the CFPB, the proposed rule would jumpstart competition by forbidding financial institutions from hoarding a person’s data and by requiring companies to share data at the person’s direction with other companies offering better products. 

FinCEN Proposes New Rule to Enhance Transparency in CVC Mixing and Combat Terrorist Financing

Adam Witmer
BSA, Regulatory Update

On October 19, 2023, FinCEN announced a Notice of Proposed Rule Making (NPRM) that identifies international Convertible Virtual Currency Mixing (CVC mixing) as a class of transactions of primary money laundering concern. The NPRM highlights the risks posed by the extensive use of CVC mixing services by a variety of illicit actors throughout the world and proposes a rule to increase transparency around CVC mixing to combat its use by malicious actors including Hamas, Palestinian Islamic Jihad, and the Democratic People’s Republic of Korea (DPRK). 

FRB Fines Metropolitan Commercial Bank for BSA Violations

Adam Witmer
BSA, Regulatory Update

On October 19, 2023, the Federal Reserve Board issued an enforcement action and fined Metropolitan Commercial Bank, of New York, New York, approximately $14.5 million for violations of customer identification rules and for deficient third-party risk management practices relating to the bank's issuance of prepaid card accounts. The Board conducted an investigation of MCB’s issuance of general purpose reloadable prepaid cards with MovoCash, Inc.,  a former third-party program manager for MCB’s Global Payments Group, that identified deficiencies in the Bank’s third-party risk management and compliance with the Customer Identification Program under BSA.

VIDEO: Filling Out the 1071 Data Collection Form

VIDEO: Filling Out the 1071 Data Collection Form

Adam Witmer
Regulation B

In this Compliance Clip (video), Adam answers a question about who can fill out the 1071 data collection form when there are multiple principal owners of a business opening an account. I other words, can one principal owner answer the demographic questions on behalf of the other principal owners, or do they each need to answer their own questions?

CFPB Takes Action Against Chime (Sendwave) for Deceptive Practices

Adam Witmer
Regulatory Update, UDAAP, Regulation E

On October 17, 2023, the CFPB took action against Chime Inc. for deceiving consumers about the speed and cost of remittance transfers through its mobile app, Sendwave. According to the CFPB’s press release, Chime also illegally forced consumers to waive their legal rights, failed to provide consumers with legally required disclosures and receipts, and failed to properly investigate consumer disputes and errors.

CFPB and DOJ Issue Joint Statement Warning Against Immigrant Discrimination

Adam Witmer
Regulatory Update, Fair Lending

On October 12, 2023, the CFPB and the DOJ issued a joint statement that reminds financial institutions that all credit applicants are protected from discrimination on the basis of their national origin, race, and other characteristics covered by the Equal Credit Opportunity Act, regardless of their immigration status. The joint statement was issued in light of consumers’ reports on being rejected for credit cards as well as for auto, student, personal, and equipment loans because of their immigration status, even when they have strong credit histories and ties to the United States and are otherwise qualified to receive the loans.

CFPB Issues Guidance for Large Banks on Charging Illegal Fees for Basic Customer Service

Adam Witmer
Regulatory Update

On October 11, 2023, the CFPB issued an advisory opinion regarding a provision enacted by Congress which generally prohibits large banks and credit unions from imposing unreasonable obstacles on customers, such as charging excessive fees, for basic information about their own accounts. The advisory opinion clarifies that people are entitled to get the basic information they need without having to pay junk fees.

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